Dirty Jersey: Feds Bust Dozens in Corruption Scandal

Corruption sweep to be among biggest in state history

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Jersey City Deputy Mayor Leona Beldini, in handcuffs, is walked to a waiting bus outside FBI offices in Newark, New Jersey. When asked about the arrests, she said she had no idea what this is about.

The mayors of Hoboken, Secaucus, Ridgefield were among 40 people arrested in early morning raids across New Jersey this morning as federal officials unveiled a long-ranging probe into public corruption and international money laundering, officials said

FBI and IRS rounded up various elected officials and several rabbis across the state in what is being described as one of the biggest investigations of its kind in Jersey's scandal-plagued history.

Dirty Jersey: Elected Officials Led Away in Cuffs

Feds busted two mayors and dozens of other officials across the state in what is being described as one of the biggest corruption investigations of its kind in Jersey's scandal-plagued history. (Published Thursday, July 23, 2009)

The corruption investigation, which has been ongoing for over ten years according to officials, dovetails with a "high-volume international money-laundering conspiracy." It is said to involve rabbis in the Syrian Jewish enclave in Brooklyn and Deal, New Jersey. It started when money transfers drew the interests of the feds who followed the trail back to small-town Jersey corruption.

“The list of names and titles of those arrested today sounds like a roster for a community leaders meeting," said Weysan Dun, Special Agent In Charge of the FBI in Newark., at the news briefing. “Sadly, these prominent individuals were not in a meeting room but were in the FBI booking room this morning."

Among those arrested this morning were Assemblyman Daniel Van Pelt (R-Ocean), Jersey City Deputy Mayor Leona Beldini, Hoboken Mayor Peter Cammarano and Secaucus Mayor Dennis Elwell, all Democrats, authorities said. Several area rabbis and other community leaders and politicians, including Jersey City Council President Mariano Vega, were arrested.

The scandal caused New Jersey's Community Affairs Commissioner to resign. Gov. Jon Corzine said he asked Joseph Doria to step down and Doria agreed.

When asked why, Corzine said "Simple: can he be effective in the office that he holds under the conditions that there is a serious investigation going on in the context of this deep vein of corruption that was unveiled today — and the answer is no."

Officials say separate from the corruption probe, some of the suspects charged today were also connected to an illegal human organ-selling ring. Investigators say some charged would take cash payments to help find organs for sick patients in need of transplants. It's unclear where the body parts might have come from or how many surgeries may have been done.

The body parts scheme involved kidney transplants, authorities said. Patients in need would pay middle-men to find willing donors in Israel. Investigators said the suspects would then have the donor and patient lie to hospitals that they were related. Hospitals would then do the operation unaware that cash payments were part of the deal. Officials say Robert Wood Johnson Hospital in New Brunswick and Johns Hopkins in Baltimore were allegedly contacted by the suspects for these procedures.

In past years, New Jersey has seen more than 100 corruption-related arrests of public officials. At a noon press conference officials detailed the charges (view as .pdf) against the nearly four dozen individuals.

Secret recordings made of the defendants by the feds paint a classic portrait of Jersey-style corruption.

In April of this year, as a Hoboken councilman and mayoral candidate, the 32-year-old Cammarano, after meeting with a developer who had promised him a bribe of several thousand dollars, said “I wanna make sure that I, you know, you, you’re my man,” emphasizing that he was a proponent of redevelopment, according to court papers.

Later when asked by the “cooperating witness” who interacted with all 44 suspects if his development projects would be sped through the bureaucratic process, Cammarano said, “I promise you… you’re gonna be, you’re gonna be treated like a friend,” according to the court documents.

Defendant Michael Schaffer, a Commissioner with the North Hudson Utilities Authority, told the cooperating witness, Cammarano “told me, ‘Michael, the way I operate politics, anybody who helps me, I help them. That’s the way I operate. And if you’re not there the first round, I don’t need ya’ the second round.”

Later on May 19, Cammarano allegedly told the witness, "hopefully, we, we, we, you know, we get to the point where I’m sworn in on July 1st, and we’re breaking down the world into three categories at that point. There’s the people who were with us, and that’s you guys. There’s the people who climbed on board in the runoff. They can get in line. . . And then there are the people who were against us the whole way. They get ground . . . They get ground into powder.”

Law enforcment officials confirmed later today that the cooperating witness is Solomon Dwek, a real estate developer in Monmouth County, New Jersey, who was charged in 2006, with scheming to defraud PNC Bank out of $50 million. Sources said he will likely receive a greatly reduced sentence for his cooperation in this probe.

According to the court papers, it's not quite clear how the international money-laundering scheme is related to corrupt local politics. Two of the Rabbis involved, Mordchai Fish, who served at Congregation Sheves Achim, a synagogue in Brooklyn, and his brother Albert Schwartz, were caught on tape having conversations with the cooperating witness that seemed straight out of a movie script, according to court transcripts:

“I had 25 million from [the bank] – 20 million – that schnookie deal. I gave 20 million to [another bank]. I, I took five million. I sent it offshore..” said the witness, who was reputedly also involved in a counterfeit handbag racket, according to the court papers.

At least five rabbis have been arrested.

"These men of the cloth... hid their criminal activity behind a 'cloak of rectitude,'” said New Jersey's acting United States Attorney Ralph J. Marra Jr.

Defendant Issac Rosenbaum, meanwhile, was caught up in a shady organ procurement program, where an undercover FBI agent and the cooperating witness pretended to need a human liver for the undercover’s sick uncle, the feds charge.

“Let me explain this to you,” said Rosenbaum on February 26, 2008 according to the court documents. “It’s illegal to buy [ a liver]. It’s illegal to sell.They are going to investigate him [the donor] not you, not your uncle. He’s going to speak to a social worker and a psychologist to find out why he is doing it… and it is our job to prepare him.”

The cost would be $160,000 for the liver donation – 50 percent up front – but Rosenbaum repeatedly made it clear, according to court papers, “It's illegal to buy or sell organs. .. . So you cannot buy it. What you do is, you're giving a compensation for the time . . . whatever–-he's not working. You can't even mention.”